Hernani Company produces wallets, bags and belts.

The following costs information is available for the quarter ended

March 31 of the current year:
Materials put into production: P264,000, of which P78,000 is indirect.
Factory labor costs: P143,000, excluding P40,000 indirect.

Other costs incurred:

Factory depreciation, P50,000
Office depreciation, P28,000
Freight costs for materials purchased, P8,000
Freight costs for goods delivered to customers, P12,000
Janitor’s wages for cleaning the office, P10,000
Janitor;s wages for cleaning the production area, P10,000
Total selling, general & administrative expenses, P165,000
1. The amount of product costs is _____________

At august 31, selected accounts of Majoy Manufacturing Company show the following:

August 1 inventories:
Raw Materials P8,200
Work in process 14,700
Finished Goods 12,600
August 31, inventories:
Raw Materials P7,100
Work in process 16,900
Finished Goods 10,500

The goods available for sale was P40,400, and material purchased during the month was P1,900. Factory overhead was
applied at 80% based on direct labor cost.
2. How much is the total manufacturing cost? _________
3. How much is the overhead applied? __________

The following data are available from the records of Celestine Manufacturing Company for the period just ended:

Gross profit P1,920,000

Increase in Finished Goods 200,000
Increase in Work in process 480,000
Decrease in Raw Materials 250,000
Prime Costs 6,750,000
Conversion costs (FOH is 50% of
DL costs) 4,500,000
4. The raw material purchases during the period:
a. P3,750,000 b. P3,000,000 c. P3,500,000 d. P4,000,000

The following information is available for the KayaMoYan Company for the current year:

Work in process, beg P100,000

Total manufacturing costs 70,000
Finished Goods inventory, beg 60,000
Raw materials, beg 30,000

Work in process inventory was decreased by 40%, while Finished goods inventory was increased to 40%. Mark up is
20%.
5. How much is the Cost of Goods Sold? ________
6. How much is the sales?

The Work in process beginning is 20% less than Work in process at the end. Prime costs was P675,000, while
conversion costs was P450,000. FOH is applied at 50% based on direct labor cost. The goods available for sale was
P730,000 of which P130,000 come from finished goods inventory, beginning.
7. How much is the Work in process at the beginning? __________
 The following data were taken from the records of EFG Corporation:

June 1 , 2018 June 30, 2018

Inventories
Direct Materials P ? P 80,000
Work in Process 175,000 210,000
Finished Goods 130,000 156,000

Materials purchased P 92,000

Factory Overhead 75% of DLC 75,000
Operating Expenses 15% of sales 50,000
Net income for the month 50,000

8. How much is the cost of goods sold? __________

9. Direct materials inventory on June 1?__________

Makarel industries electricity costs and machine hours over a nine-month period follow: (Relevant range is from 2,000 to
5,000 machine hours)

Month Machine hours Cost

April 2100 P 9,750
May 3400 14,300
June 5800 21,640
July 4900 19,550
August 2500 11,150
September 3000 12,900
October 2400 10,800
November 1800 8,440
December 4800 22,000

10. Using high-low method, how much is the annual fixed costs? _______
11. Using high-low method, how much is the electricity costs if the actual machine hours used is 2,800? ________

Mr.Pogi Company has been reviewing its total cost over the last few weeks and has established the following:

Week Units produced Cost

1 220 P 3,450
2 120 2,160
3 350 4,425
4 400 4,800
5 150 2,400
6 480 5,400
7 190 2,720
8 380 5,700

12. The company is aware that fixed costs increase by P600 when production exceeds 200 units. What would be the total
cost at a production level of 170 units? ________

Canon Company’s compensation scheme for its factory workers provides a combined maximum guaranteed wage
and a piece rate. Each workers is paid P30 per piece with a minimum guaranteed wage of P3,600 per week During the
first week of July, the production department submitted the following output:

Team No. of Units produced

Workers per worker per week

ABC 50 110
DEF 55 140
GHI 60 105

13. The total amount of payroll is _____________

14. The amount debited to factory overhead ___________
 On a Saturday morning, a customer brings a rush order of 10,000 units of Product X. Dodoy Company agrees to
produce theses units for the customer on Sunday, for shipment on Monday. Ninety of direct laborers who earn P100 per
hour worked eight hours on Sunday to Complete the order. Dodoy Company’s regular working days are Monday to
Saturday. The Company pays 40% OT premium for Sundays.
Materials costing P8 per unit was used on the order. The factory overhead is applied at 2/3 of direct labor.

15. The amount of direct labor charged to the job is __________

16. If GP is 40% based on cost, the unit sales price would be ________

The following report pertains to the number of hours worked by three of the factory workers of BSA Corporation.
They work 8 hours per day. The labor rate per hour is P100.

Shift Nayk konbers Rebuk

6am-2pm 8 8
2pm-10pm 8 6 8
Beyond 10pm 4 4
Total 20 14 12

Nayk and Konbers are receiving 20% shift premium during the morning shift only (6am-2pm). Company’s policy on
overtime is time and a half.
17. The amount charged to direct labor is _________
18. The amount charged to factory overhead is __________

Jojoy Corporation manufactures TV sets, provides the following data for 2018:
Budgeted Overhead Cost P 700,000
Actual Variable OH 200,000
Actual Fixed OH 125,000
Under-applied Overhead 24,000
OH Rate (per machine hour) 20
19. The normal capacity is ________
(note: The NORMAL CAPACITY is the DENOMINATOR in the formula of predetermined OH rate)
20. The actual number of machine hours is _________

Mary Manufacturing Company manufactures hardware for local area network. The firm applies overhead to jobs at a
rate of 120% of direct labor cost. The mark-up is 20%. On December 31 of the current year,the following information for
the year was available from the records:

Direct Materials Inventory:

Beg balance P 13,300
Purchases ?
Balance, end 2,050
Factory supplies used 5,000

Work in process inventory:

Beg balance P 28,000
Direct Materials ?
Direct Labor 45,000
Overhead ?
Balance, end 12,000
Finished Goods inventory:
Beg balance P 45,000
Goods Completed 682,000
Goods sold ?
Balance, end 42,000
Actual overhead for the year is P60,000

21. The cost of direct material purchased during the year amounted to:
a. P560,750 b. P567,000 c. P569,050 d. P560,750
22. The amount of adjusted cost of goods sold amounts to:
a. P685,000 b. P691,000 c. P688,000 d. P694,000
23. The amount of sales is
a. P856, 250 b. 863,750 c. P822,000 d. P829,200

CPA Company budgeted total variable manufacturing overhead at P180,000 for the current period. In addition, the
company budgeted costs for factory rent at P215,000, depreciation on office equipment at P12,000, office rent P92,000
and depreciation of factory equipment at P38,000. All these costs were based upon estimated machine hours pf P80,000.
At the end of the period, the actual factory overhead had a balance of P387,875. Actual machine hours of P70,000.

24. The over or under applied overhead for the period is:
a. P9,000 over b. P9,000 under c. P82,000 over d. P82,000 under

Makel Corporation produced variety of products, all of which is process in three departments.
Budget information for the current year is as follows:

Department 1 Department 2 Department 3

Budgeted OH P 200,000 P 300,000 P 250,000
Budgeted DLH 25,000 15,000 10,000
Budgeted machine hours 4,200 40,000 3,500

During the year, the company produced 8,000 units. All these units were sold with 40% mark up on cost. Actual cost
information for each unit of product is presented below:

Department 1 Department 2 Department 3

Direct materials P 20 P 12 P 16
DLH 1.5 0.5 1
Direct labor rate (per hour) P 20 P 25 P 22
Machine hours 0.3 1.6 1.2
Actual total OH incurred P 95,000 P 100,000 P 195,000

Using plant wide rate based on direct labor hours:

25. The amount of over or under applied overhead is __________
26. The total billing price is__________

Using departmental rate assuming department 1 is based on DLH while department 2 and department 3 are using most
appropriate basis.
27. The overhead rate to be used in Department 2 is ________
28. The overhead applied in Department 2 is _________
29. The total cost is ________
30. The unit selling price is ________

Lappy Company is a manufacturer of wood products, uses a predetermined factory overhead rate based on direct
labor cost. For 2018, Lappy Company budgeted manufacturing overhead was P9,000,000, based on P4,500,000 direct
labor cost. Actual manufacturing overhead amounted to P9,630,000. For 2018, the overapplied manufacturing overhead
was P330,000. the actual direct labor rate per hour is P50.
The number of direct labor hours is __________
ABC Company has two service departments (HR and R&M) and two producing departments (Assembly and
Finishing). HR allocates its direct cost based on the number or employees while R&M allocates based on number of
repair hours.

Service Departments Production Departments Total

HR R&M Assembly Finishing
Direct cost P 200,000 400,000 1,200,000 800,000 2,600,000
# of employees 120 200 500 300 1120
Repair hours 50 40 50 100 240

31. Using direct method to allocate service cost, the total OH costs of Assembly Department is ________
32. Using the Step Method, the service cost allocated to Finishing Department is ________
33. Using sequential method, the total OH of Assembly Department is _________
34. Using algebraic method, the total OH of Finishing Department is __________
 On January 1, 2019,Eric Company requires 40,000 shells for its signature product, “Pearl Shirl.” The shell will be
used evenly throughout the year. The cost to place one order is P20 while the cost to carry the shells in inventory for one
year is P.040.
The company works 250 days per year. The average or normal purchase lead time is 7 working days while maximum
lead-time is 10 working days.

35. What is the Optimal Order Quantity (EOQ)? __________

36. How many orders should be placed within the year? ________
37. What is the average inventory in units? _________
38. What is the annual inventory carrying cost? _______
39. How much is the annual ordering cost? ________
40. How much is the total inventory costs? _________
41. How many units should Eric maintain a safety (buffer) stock? ________
42. What is the reorder point ? _________

Casio Company has used a traditional cost accounting system to apply quality control costs uniformly to all products
at 15% of direct labor cost. Monthly direct labor cost for its main product is P30,000. In an attempt to distribute quality
control cost more equitably, Casio is considering ABC. The monthly data shown below have been gathered for the main
product. The three activities are (1) income material inspection, (2) in-process inspection, and (3) product certification.
Costs are to be allocated to each activity on the basis of cost drivers.
Activity Cost Driver Cost Rate Quantity for Main Product
1 Number of types of materials P12 per type 12 types
2 Number of units P0.14 per unit 17,500 units
3 Number of orders P77 per unit 30 orders
43. What is the monthly control cost assigned to the main product using ABC?
a. P150 per order c. P404 lower than using the traditional system
b. P4,500 d. P404 higher than using the traditional system

The Scottie Company uses a job order cost systems. The inventories on October: Finished goods, P5,000 (Job order No.
1000), Work in process, P445 (Job Order No. 1001) and direct materials of P2,000. Purchases of direct materials, 30,000
pieces @ 1.40 per piece. Following are the additional costs incurred during the month.

Direct Direct Labor Direct Labor

Job Order Nos. Materials Cost Hours
1001 P4,100 P1,375 1,300
1002 9,150 7,250 3700
1003 11,275 14,325 8,200
1004 3,225 2,800 1,500
1005 6,500 6,100 3,200
1006 2,750 1,650 980
Manufacturing overhead costs are charged to jobs on the basis of P1.5 per direct labor hours used. The actual
manufacturing overhead cost for the month totaled P30,350. During October, Job Order Nos. 1001, 1002, 1004, and 1005
were completed.. Jobs 1001 and 1002 were shipped out and the customers were billed for P9,000 for Job No. 1001 and
P20,000 for 1002.
44. The cost of goods manufactured amounted to:
a. P55,495 b. P55,500 c. P56,495 d. P57,500

45. The work in process on October 31 amounted to:

a. P25,675 b. P29,820 c. P43,770 d. P69,445

46. The cost of goods available for sale amounted to:

a. P55,495 b. P60,495 c. P60,500 d. P61,495

47. The finished goods on October 31 amounted to:

a. P8,275 b. P17,400 c. P30,675 d. P43,770

48. The cost of goods sold amounted to:

a. P29,820 b. P29,375 c. P21,950 d. P7,870

49. The direct materials on October 31 amounted to:

a. P5,000 b. P7,000 c. P30,675 d. P43,770